Lead generator, Intermundo Media, LLC used the name “Delta Prime Refinance” in advertisements that falsely claimed homeowners could refinance their mortgages for “free” with “no hidden fees.”
The relevant complaint charges Delta Prime Refinance with making deceptive and unsupported claims in its advertisements that overstated how much consumers could reduce their payments if they refinanced their mortgages, how low their annual percentage rate would be and how easy it would be for them to qualify for refinancing. According to the Federal Trade Commission, some ads falsely claimed there were no hidden fees and that the mortgage refinancing was “free.”
Other ads claimed that fixed interest rates were available, when in fact the rates and the amount consumers spent on interest were variable. The complaint charges Delta Prime Refinance with violating the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, or “MAP” Rule and Regulation N, and the Truth in Lending Act and Regulation Z.
“An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else.”
According to the complaint, the company ran these ads on Google, Microsoft, AOL, and Yahoo, as well as on its own websites. When consumers clicked on the ads, they were sent to a landing page where they provided contact information, which was ultimately passed on to providers of mortgage refinancing.
Under the terms of the settlement, in addition to paying the $500,000 civil penalty, Intermundo Media is prohibited from:
- misrepresenting the terms and conditions of any financial product or service, and any term or condition of a mortgage credit product,
- disclosing, selling, or transferring the consumer data obtained through the Delta Prime Refinance lead generation service; and
- violating the FTC Act; the MAP Rule and Regulation N; and the Truth in Lending Act and Regulation Z.
It is no great secret that third-party marketers, including online lead generators in the mortgage, student loan and small dollar lending verticals, must take preemptive compliance measures to in the face of steadily increasing scrutiny by the Federal Trade Commission, the Consumer Financial Protection Bureau, and state Attorneys General. Consult with an experienced regulatory compliance and civil investigative demand lawyer for advice regarding disclosures, the “overall net impression’ of advertisements, the regulatory enforcement landscape and for assistance resolving complex investigations.
Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.